Arweave (AR)

About Arweave (AR)

Arweave is a decentralized data storage platform that aims to provide permanent data storage on a distributed network of computers. The goal of Arweave is to create a “permaweb”, where information can be stored and accessed indefinitely, similar to the Library of Alexandria, but in a digital form. Unlike traditional cloud storage providers like Google, Amazon, or Microsoft, Arweave focuses on creating a permanent, censorship-resistant archive of data that is accessible by anyone, anywhere, for as long as the network exists.

Arweave leverages a unique blockweave structure (distinct from the typical blockchain) and a consensus mechanism called Proof of Access (PoA) to incentivize long-term data storage. The AR token is used to pay for data storage, as well as to reward those who provide storage services. This makes Arweave one of the few blockchain-based projects dedicated to solving the problem of permanent, tamper-resistant digital storage.

Who Created Arweave?

Arweave was founded in 2017 under the original name Archain by Sam Williams and William Jones. The project rebranded to Arweave in 2018 as it prepared to scale and apply for the Techstars startup accelerator program. The project gained significant attention and financial backing after participating in Techstars, which helped it raise funds from prominent venture capital firms.

In 2019, Arweave raised $5 million from investors such as Andreessen Horowitz and Union Square Ventures. It later raised an additional $8.3 million in March 2020, which was used to expand the developer and user communities around the Arweave ecosystem.

How Does Arweave Work?

Arweave differs from traditional blockchain projects in several key ways, especially when it comes to how data is stored and validated. Here are the main components that make Arweave unique:

1. Blockweave Structure

• Arweave doesn’t use the standard blockchain structure (where each block links to the previous one). Instead, it uses a blockweave. In a blockweave, each block is linked to two previous blocks (instead of just one).
• This design allows Arweave to create a highly interconnected, scalable network of data storage that can scale more efficiently while ensuring the integrity of stored data.
• The blockweave structure enables permanent storage by ensuring that each new block is tied to multiple previous blocks, making it hard to tamper with stored data.

2. Proof of Access (PoA) Consensus Mechanism

• Arweave uses Proof of Access (PoA) instead of traditional Proof of Work (PoW) or Proof of Stake (PoS) mechanisms.
• In PoA, when a node (computer) participates in the network and stores data, it must prove that the new bundle of transactions (or data) it is adding to the network contains a randomly selected “marker” from an earlier block.
• This proof of access mechanism helps maintain the integrity of the data being stored, ensuring that it remains accurate and unaltered over time.
• Nodes that successfully add new data to the network are rewarded with AR tokens.

3. Permanent Data Storage

• One of Arweave’s main selling points is its promise of permanent storage. When data is uploaded to Arweave, it is stored indefinitely. The user only needs to pay once for the storage, and as long as the network exists, the data will be preserved.
• Unlike other decentralized storage projects (like Filecoin or Sia), Arweave doesn’t require users to pay recurring fees. Instead, users make a one-time payment, and the data is stored permanently.

4. Content Moderation

• Arweave has a built-in content moderation feature, allowing nodes to decide what content they are willing to store.
• When content is uploaded to Arweave, nodes can choose whether to accept or reject the data based on its type (e.g., images, text, audio). This ensures that nodes have control over the type of content they host and can reject inappropriate or unwanted files.
• Users who store larger or more diverse content may earn a greater share of transaction fees, providing an incentive for data storage.

5. Accessing Stored Data

• One of the key features of Arweave is that data stored on its network is accessible using traditional web browsers (like Chrome, Firefox, etc.), without the need for specialized wallets or blockchain infrastructure.
• This makes it easy for anyone to access stored files without needing to learn about cryptocurrency or blockchain.

Why Does AR Have Value?

AR is the native cryptocurrency of the Arweave network. It is used to pay for data storage services and reward those who provide storage. The value of AR comes from several factors:

1. Payment for Data Storage

• Users who wish to store data on the Arweave network must use AR tokens to pay for storage.
• Storage is a one-time fee, and as Arweave stores data permanently, the AR tokens provide an economic incentive for those hosting and maintaining the network.

2. Limited Supply of AR Tokens

• The total supply of AR tokens is capped at 66 million. This limited supply adds a deflationary aspect to the currency, potentially increasing its value over time as demand for storage grows.
• In June 2018, the first 55 million AR tokens were created. The remaining 11 million AR tokens are gradually released to the network’s storage providers as rewards for participating in the network and offering storage services.

3. Long-Term Value for Permanent Storage

• Arweave’s permanent storage solution adds a unique use case for AR tokens. As more data is stored permanently, the value of the network and the demand for its services could grow.
• In particular, institutional and archival organizations (like the Internet Archive, which already stores data on Arweave) could increase demand for permanent data storage, driving up the demand for AR tokens.

4. Incentive for Storage Providers

• Those who provide storage services to the Arweave network are rewarded with AR tokens. This provides an incentive for nodes to participate in the network and store data, ensuring its long-term availability and integrity.